The deja vu in bold Putin agenda

Declaring war on Russia's legions of corrupt, inefficient officials, President Vladimir Putin set out an ambitious - but so far rhetorical - agenda yesterday to renew the country's long-stalled liberal reforms.

Wielding the words "transparency" and "efficiency" like sledge hammers meant to crush bureaucratic resistance, Mr. Putin warned that Russia's last window of opportunity to become a "normal part of world civilization" is closing fast.

Russia needs to implement sweeping judicial reform, streamline the tax system, guarantee investor rights, legalize private property in land, and radically slash the size of government, he said. "The essence of many of our problems is a lack of confidence in the state, which has betrayed its citizens many times.

"No one should fear change," Putin told a stony-faced joint session of parliament. "In the past year, we have learned to work together; but now we must learn to work effectively."

Last week, in his first major government reshuffle, Putin placed Kremlin loyalists, including a number of former KGB colleagues, in key positions in the defense and interior ministries, which control most of Russia's security forces.

In yesterday's address, he praised the Army for its role in the Chechnya war, but returned repeatedly to the failings of other sectors of government - suggesting further shakeups may be coming.

But critics pointed out that Putin's chilling assessment of Russia's problems was little changed from last year's state-of-the-nation address, offered just months after he assumed the presidency. Most of Putin's attempts to implement change have bogged down, they say. Others have raised the specter of authoritarianism.

"Once again, he talked more about problems than solutions," says Alexander Konovalov, director of the independent Institute of Strategic Assessments in Moscow. "It was a good speech, but we have heard many fine speeches since Russia supposedly took the road of reforms."

Absent from the hour-long address was any mention of Russia's deteriorating human rights record - especially in Chechnya - and concerns over Kremlin efforts to corral independent media.

Events conspired to make that point, however, even as Putin spoke. The state-owned natural gas giant Gazprom, which has been trying for the past year to capture Russia's last private TV network, NTV, defied court decisions and appointed a new, pro-Kremlin board of directors for the network.

Boris Jordan, a US investment banker of Russian descent, was named general director. A strong champion of foreign investment in Russia, Mr. Jordan also has links to the vastly corrupt privatizations of the Yeltsin era.

"We understand that the ultimate goal of this meeting is the imposing of full political control over us," said a group of NTV journalists who tried to crash the Gazprom meeting. "We do not doubt that Vladimir Putin, as in the past, knows about what is happening and bears responsibility for the consequences."

Leaving aside questions of independent media voices, Putin spelled out the need for "radical" reforms of legal and investment laws to boost investor confidence, raise the "extremely low" standard of living, and stop $20 billion in annual capital flight. "The essence of many of our problems is a lack of confidence in the state, which has betrayed its citizens so many times," he said.

While Putin declared he had reinvigorated central control during his first year in office, results so far have been mixed, say experts. Despite the best economic conditions of the past 30 years, thanks to high oil prices on world markets, economic indicators are beginning to falter.

A new tax code setting a 13 percent flat tax came into effect this year. But other priority issues, such as state interference in business, lack of investor confidence, and arbitrary law enforcement have seen little progress. A Putin-backed judicial-reform law, for example, was scuttled in January.

"Putin understands the necessity of changing his idea of a 'dictatorship of law' - which he formulated last year - to the 'rule of law,' " says Vladimir Gelman, dean of the European University in St. Petersburg. "The main question is, what kind of state will be constructed in Russia?"

"Very few things have really changed," Mr. Gelman adds. "The key word is 'liberalization,' and not just in the economy. I hope it will be freedoms and rights, too."

Putin papered over some his own failings of the past year by shifting the onus for lack of progress, in time-honored Russian fashion, to bureaucrats. Bureaucrats "continue to put pressure on business, squeezing business initiative and activity," he warned. "This is the path to economic and social stagnation."

"Putin's diagnosis is that the Russian bureaucracy is the main obstacle to reforms," adds Iosif Diskin, head of the Institute for Social and Economic Issues at the Russian Academy of Sciences in Moscow. "His weak point is that he presents himself as a patron, a boss of business, and not its partner."

As for Putin's proposed solutions, "These are strong declarations to increase the effectiveness of the state, to increase discipline," says Mikhail Delyagin, director of the independent Institute for Global Forecasting in Moscow. "They are made using beautiful phrases, but so far they are only words."